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Nokia Oyj (NOA3.DE)

XETRA - XETRA Delayed price. Currency in EUR
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5.08+0.02 (+0.38%)
At close: 05:35PM CEST

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  • A
    Abu
    Summing up my thoughts on profitability, growth and the share price in one single post:
    NOKIA'S PROFITABILITY

    Nokia is both a low and a high profit company. We know Nokia's licensing business group (Nokia Technologies) has an OM of 75% or more. Nokia's IP Networks is in the high teens and the fast-growing (+25% YoY) Fixed Networks also is in the double digits. Where action to improve profitability is still needed include Mobile Networks (9.5% in H1) , Optical Networks (low single digits) and Submarine Networks (OM margin positive) as well as Cloud and Network Services (0.9% in H1).

    In my view a company with growth prospects (especially in Network Infrastructure and Cloud and Network Services where the latter includes private wireless) and plenty of scope to improve profitability is far more interesting than one that has already reached it's max performance and thus also its peak valuation.

    NOKIA'S SHARE PRICE

    There are basically three forces that can help lift the sp higher: 1) larger sales; 2) bigger margin; 3) higher acceptable P/E (with E constant or improving). We know Nokia is valued lowly, with an EPS for 2022 of $0.42 we get a P/E of just 12.4 which can be compared to a much higher market average. Let's say the market finally gets convinced Nokia is worth investing in and that the P/E reaches 17 instead of the current 12 meaning am upside of about 40% (BTW the market is much more richly valued than that: https://www.multpl.com/s-p-500-pe-ratio).

    In 2023 the share price has additional potential if the EPS keeps rising in a satisfactory manner thanks to higher sales and operating margins. Just as an example, Cloud and Network Services had a paltry margin of 0.9% in H1 producing a profit of EUR 14M, which would mean 28M on an annual basis. Get this almost 1% margin to 20% (not particularly high for largely software sales) and those 28M will have turned to EUR 560M (20 x 28M), producing EUR 10 cents of EPS from just this one business group and without counting with sales growth.

    Mobile Networks also has margin improvement potential, each percentage point of improved margin means 100 million in additional profit or 1.75 cents of profit per share. As the OM in 2021 was only 6.6% we can reasonably expect this to go clearly beyond 10% within some time frame. If Mobile Networks increases its margin by 5 percentage points, that would bring 8.7 cents of additional EPS. Optical Networks and Submarine Networks are only slightly profitable so here is a clear potential to raise profitability. They had combines sales of appr. 2.6B in 2021. If these improve their margins on average 5 percentage points (and still remain in the single digits) the additional profit equals EUR 130M bringing in 2.3 cents per share.

    Thus without including any sales growth, just by improving operational performance from the EUR 0.37 reached in 2021 we can easily imagine (as displayed above) EPS growing 16 cents to EUR 0.54. Valued at the current lousy P/E of 12 we would have a sp of about 6.5. Getting the P/E higher to a more average level and projecting sales growth, the sp would obviously be much higher. Reaching EPS of EUR 0.54 through stronger margins and apply a reasonable P/E of 17, then Nokia's share price would be EUR 9.18 (and slightly more in USD).

    Add growth to this cocktail and we'll be in the double digits. Nokia's total addressable market is growing 4% this year. We also know Nokia's long-term target is to grow faster than the market. The goal is now to emphasize growth as the CEO said in the 2021 annual report: "Considering the pace of our delivery in 2021, we have created an excellent foundation to move to the “accelerate” phase of our strategy to deliver further growth and extend profitability.”
  • M
    Mark
    Nokia Mobile, the caretaker of the Nokia brand for mobile phones, tablets and some accessories, has signed a contract with Egypt’s Etisalat for Advanced Industries (EAI) to produce one million cell phones, including feature phones and smartphones. Production is expected to begin this year and double in the coming period.

    The agreement was signed by Tamer El-Gamal, General Manager of HMD in Egypt, and Ahmed Abu Auf, Managing Director of Etisal Advanced Industries, EAI, in the presence of numerous representatives from HMD Global, Etisal for Advanced Industries, EAI and the Egyptian Ministry of Communications and Information Technology.

    This deal will help Egypt create specialized jobs for young people in the field of information technology and electronics, and HMD Global will provide its expertise, equipment and know-how to help this process. So in the near future, we should see Nokia phones manufactured to HMD Global OY international quality specifications, including electronic components, assembly, packaging and testing, which are fully equivalent to international products in quality and efficiency, thus achieving Egypt’s strategy in its quest to localize the technology industry. This should make Egypt a regional center.
  • A
    Abu
    GLOBAL DATA REPORT: In IP core routing Nokia gets highest overall points (more than Cisco etc) and is a "leader" in all categories out of five except one where it's judged to be "very strong". https://onestore.nokia.com/asset/212708

    BTW Nokia's IP Routing business has an operational margin in the high teens and having the most competitive product is basically a positive for market share growth.
  • w
    wayne
    Sadly, I’m starting to think I am just as guilty of being unrealistically optimistic with outlandish predictions as the folks I ostracized when I wrote at the start of the year that 7 $/ share would be a fantastic report card for Pekka. As the days continue to melt away, 6 $/ share is starting to look like a cloud in the sky where only angels (with their diamonds) are hanging out.
  • C
    Charlie Nice
    Haven't made a dime in eight yrs
  • S
    Sweetheartface
    9 August 2022
    Perth, Australia – Nokia today announced it has been selected by The Public Transport Authority of Western Australia (PTA) to design, build and maintain a next generation railway communications system over the next decade in Perth.

    METRONET infrastructure and public transport program is the long-term blueprint for Perth's future. As a critical element of the METRONET program and as part of the agreement, more than 160 LTE/4.9G radio sites will be built to modernize the railway communication system that includes additional METRONET track and tunnels with a total of 250km of railway. The solution will be based on Nokia private 4.9G/LTE mission-critical IP/MPLS, Data Center Fabric and microwave backhaul solutions, to support a Communications Based Train Control (CBTC) High Capacity Signalling system for greater accuracy and efficiency compared to traditional signalling systems.

    Nokia’s solution will be used to upgrade the current PTA’s narrowband rail radio systems, replacing the existing analogue technology with a high-tech 4.9G/LTE digital platform which is necessary for extremely reliable mission critical voice, high-speed data and video services. The Radio System Replacement project is subjected to the Critical Infrastructure Act 2021 with scope to include a full Cyber Security fabric across all solution elements.

    Rob McCabe, Head of Enterprise for Oceania at Nokia, said: “We are thrilled to partner with PTA for this prestigious project to design, build and maintain the next-generation railway communications network. Powered by Nokia’s private wireless network solution, the new railway communication system will help enhance the accuracy of the system leading to improved experience and safety. Nokia is at the forefront of supporting railway networks accelerate digital transformation for more efficient operations while delivering greater value to the passengers.”

    Nokia has deployed mission-critical networks to more than 2,200 leading enterprise customers in the transport, energy, large enterprise, manufacturing, webscale, and public sector segments around the globe. It has also extended its expertise to more than 485 large private wireless customers worldwide across an array of sectors and has been cited by numerous industry analysts as the leading provider of private wireless networking worldwide. It has worked closely with major railway operators worldwide to bring the benefits of private LTE connectivity and paving the way for the adoption and deployment of Future Railway Mobile Communication System (FRMCS).
  • A
    Abu
    From Reddit by WirelessBusHub: NOKIA EQUITY SUMMARY SCORE IS VERY BULLISH
    The last time Nokia had an Equity Summary Score on Fidelity of 9 or more, the stock price moved to $6.40. A good sign that with more volume, Nokia is positioned to move higher. https://www.reddit.com/r/Nok/comments/wm620t/nokia_equity_summary_score_is_very_bullish/
  • A
    Alexander
    Nokia's Ex-dividend Pay date - August 9, 2022
    Amount $ 0.0204
  • C
    Craig
    why does Nokia keep repurchasing its own shares, something on the Horizon?
  • w
    walid
    I believe every business that generates less than 10% OM must be sold.. if RAN business OM can’t go to above 10% in 2023 , it must be sold… I am sure Samsung will pay 2.5x revenue. Samsung can’t grow its market share organically so it has to buy NOK.
  • a
    aldo
    The real actual shareprice performance under Pekka Lundmark is extremely good when looking at cold hard facts and cold hard share prices on cold hard dates.

    So, in order to shut up cry babies and bathers I will do just that. Lots of bashers and haters try to spin a tale of Nokia shareprice non performance under his tenure but when looking very cold , hard and, specifically you get a much different and more acccurate picture of just what Pekka has done in his two years of a three year comeback plan.

    First, everyone knows previous CEO Suri was an overpromise under deliver excuse making machine who blundered and squandered Nokias advantages. Of course that led to his firing or let’s be kind and say voluntary resignation. So let’s look at specific dates. On 03/02/2020 Nokia announced Suri was resigning and Pekka was replacing him as CEO. Closing price on that day was 3.91. Now remember that the market new Nokia was in bad shape with all of Suri’s screwup but it did not know just how bad it was until he was fired/resigned on 03/02/20. The market needs time to price in the bad news so give It two weeks to sink in just how awful Nokia’s plight was and check that shareprice on 3/18/20. Nokia trade as low as 2.34 within two weeks as the Suri being fired news and Nokia’s plight was fully priced in.

    That 2.34 is the real cold hard stock price you use as a benchmark to gauge Pekka Lundmarks performance. By the time Pekka took over 5 months later the closing price on his first day as CEO was 5.04 and that is in no way the shareprice to use as your benchmark. Two stinking dollars and thirty four cents is your start point because that is where Nokia was really at once the market was told just how bad things were and just how fired Suri was. Of course it rebounded as the date of a new CEO taking over approached. I guarantee that shareprice would not have rebounded to 5.04 on 8/3/20 if the failure ridden, excuse machine Suri was till CEO so bashers here are way way way off base with their selective memory and their cherry picking of shareprices on dates that suit the bashing and whining.

    Face the facts crybabies and whiners and bashers alike, the real shareprice when Pekka took over as CEO was reached at 2.34 on 3/18/20 as the market digested just how bad things were at Nokia and they have reached as high as 6.40 (I don’t count the meme garbage spike to 9 plus) within 18 months of him taking the helm. If Pekka was not the CEO and had he not undertaken the bold three year comeback plan, Nokia might not exist or they would have been taken UNDER at dumpster fire valuations. Yes, Pekka is no carnival barker CEO puffing his chest and hyping NOKIA like a prostitute. He is a straight shooter who is getting the job done during extremely tough times on many fronts.
    Sorry, whiners and crybaby bashers, yes Pekka has even done well for shareholder’s especially considering where the stock would be if Suri was still CEO. You should be thanking your lucky stars he came along when he did. Do I like the current shareprice? Of course not. Do I expect the market will address it over the next year or so? Absolutely!!
    I will take Pekka as CEO of Nokia at 5.21 any day of Suri as CEO at 2.34 and that is not a dullards opinion, those are the real, cold, hard, facts as we sit here today.
  • S
    Scarter947
    It’s been pretty quiet this week related to any announcements by Nokia and volume has been extremely light. Is August a month of vacation in Finland?
  • A
    Alexander
    Nobody wants to short Nokia :
    "Nokia's (NYSE:NOK) short percent of float has fallen 8.82 % since its last report. The company recently reported that it has 17.14 million shares sold short, which is 0.31 % of all regular shares that are available for trading. Based on its trading volume, it would take traders 0.5 days to cover their short positions on average."
  • M
    Mark
    Oppo and OnePlus would reportedly (via�WinFuture) have to pay #$%$2.50 per smartphone sold as licensing fees. The issue is the parties would have to enter into a worldwide licensing deal to adhere to the German laws. They would have to pay licensing fees on smartphones sold worldwide, not just in Germany. This would be an expensive affair, and Oppo/OnePlus might prefer to exit the German smartphone market altogether instead.Apart from Germany, Nokia has sued Oppo, OnePlus, and other BBK-owned companies like Realme and Vivo in France, Finland, Sweden, Spain, the UK, and the Netherlands over the patent dispute. If the court rules in the Finnish giant's favor, it could end up securing a sales ban on all BBK-owned phones across major European countries.
  • S
    Sunny
    Nokia is partnering with French company Alstom for implementing this private network. ETTelecom August 4, 2022
    https://telecom.economictimes.indiatimes.com/news/nokia-tests-mission-critical-voice-and-data-on-4-9g-private-wireless-network-for-ncrtc/93341322
  • S
    Sunny
    BRIEF-Nokia Selected By Orange Egypt To Modernize Network
    BY Reuters. August 4:
    * NOKIA SELECTED BY ORANGE EGYPT TO MODERNIZE NETWORK FOR INCREASED RELIABILITY, SECURITY AND OPERATIONAL EFFICIENCIES
    * NOKIA WILL CONTINUE TO BE THE SOLE PROVIDER OF SDM SOLUTION OVER THE NEXT FIVE YEARS
  • S
    Sweetheartface
    I sure hope this article doesn’t have complete info. It is claiming Jio partnered with Ericsson and Samsung without mention of Nokia. I hope Nokia was awarded something by Jio. https://www.totaltele.com/514044/Jio-and-Airtel-target-5G-launch-this-month-but-Vi-stays-silent
  • S
    Scarter947
    Today’s afternoon push higher is the result of the Indian Press saying that Reliance Jio has chosen the same 3 vendors as Bharti Airtel which is great news for Nokia and bad news for Samsung. This would be a major win for Nokia and for details, go to Lightreading for confirmation. Nokia set up for a push next week above the 200 day moving average and beyond.
  • W
    WirelessBusHub
    I can't post the article on Yahoo, but here are some financial projections from an article by Business Standard which ranges from $4B to $10B.

    "Nokia said the award of the contract accounted for a 45 per cent share of the Airtel network. This, based on estimates, translates into nine circles – the ones where Nokia had deployed 4G.

    While no details on the size of the order were divulged, analysts estimate that the initial investment to roll out a neteork with the 3.5 GHz spectrum pan India will be to the tune of US $ 4 billion, without the cost of spectrum. The complete cost of the roll out with radios on other 5G bands would be around US $ 10 billion."
  • K
    Kalpana
    NOK management and highly touted IR guy have failed to bring any traction to retail, Investment brokerage, Mutual funds and Hedge fund.
    Yes people who praise NOK be real and see $5.18 for last three weeks